Albia Capital Bilbao 12 de diciembre 2012 Foreign Investment Commission STATE SUBSIDIES “ The EuroVegas case” “Withdrawl of Solar Plant Subisidies” Legal Advice & Company Internationalisation ASECOEX ASECOEX Colon de Larreategui, Bilbao (SPAIN) Tel. +(34) Mr. Txaber Fernandez Beldarrain FLORENCE (ITALY) 58 th Congress October 29 – November 2, 2014

INDEX 1.FDI in Spain 2.Ease-of-doing Business Index 3.State aid: EU Regulations 4.Spanish Regional Aid Map Case 1; EUROVEGAS, or “Welcome Mr. Marshall” 6.Case 2; Withdrawal of Solar Plants Subsidies

 Spain is the 9th largest recipient of FDI worldwide (FDI Regulatory Restrictiveness Index)  Gross FDI up 8.8% in 2013 to €15.8 billion 1. FDI in Spain  One of the leading global economic powers.  Domestic market: 47 million population plus additional demands of 57.7 million tourists.  Geostrategic position.  Interesting business opportunities.  Rapid growth in international trade and foreign investments in recent years has made Spain the sixth most open economy to FDI.

 Spain dropped to 52 nd in the 2014 Index from 46 th position on the 2013 index. Source Doing Business Reports. Word Bank 2014 Index Ranking 2013 Index Ranking ProceduresDays Doing business (overall)5246 Starting a business Dealing with construction permits Registering property Getting credit5552 Protecting Investors9895 Enforcing contracts5958 Paying taxes6733SPAINOECD Average Payments per year812 Time (hours per year) Total tax rate (% profit)58,641,3 2. Ease-of-doing Business Index

In accordance with Art. 107 Article 107 Treaty on the Functioning of the European Union (TFEU, the following States Aids are compatible with the internal market: a) aid to promote the economic development of areas where the standard of living is abnormally low; SPAIN;  26 % unemployment  GDP per capita 93 % below EU General Average (Sweden 123 %) b) aid to promote the execution of an important project of common European interest or to remedy a serious disturbance in the economy of a Member State; c) aid to facilitate the development of certain economic activities or of certain economic areas, where such aid does not adversely affect trading conditions to an extent contrary to the common interest. 3. State aid: EU Regulations

The designated areas have: 1. A GDP per capita below 75% of the EU average. 2. A total population of M (68.59 % of the population of Spain). Levels of aid that can be granted to regional investment projects carried out 1.By large enterprises; between 10% and 35% of total investment costs. 2.By medium sized companies; the percentages can be increased 10%. 3.By small enterprises; the percentage can be increased 20%. 4.Spanish Regional Aid Map

FORBIDDEN  Against Spanish & EU law THE MORE YOU ASK FOR, THE LESS YOU GET 5. Case 1; EUROVEGAS 2013 “Welcome Mr. Marshall”

Supreme Court Decisions Implemt,Solar Plants Subsidy Scheme Implemt,Solar Plants Subsidy Scheme Modification of the Subsidy Scheme Investors: National Foreign Invest. Investors: National Foreign Invest. Reasonable return rate (7,5%) Retroactive effect Reasonable return rate (7,5%) Retroactive effect International Funds: Hasdar (Abu Dhabi) RREEF Infraestructure International Funds: Hasdar (Abu Dhabi) RREEF Infraestructure World Bank ICSID Ratifying the legality of the new scheme and efects. 2012/ Case 2; Withdrawl of Solar Plant Subisidies Direct Effects  Spanish solar PV plants have suffered an average 30 to 40 per cent cut in income.  More than half of Spain’s solar “photovoltaic” companies have gone bankrupt. Discrimination due to nationality could occur if the award rendered by ICSID is in favor of international funds. If that were the case, what could Spanish investors do?